Distributed ledger technology law ("DLT law") (also called blockchain law, Lex Cryptographia or algorithmic legal order) is not yet defined and recognized but an emerging field of law due to the recent dissemination of distributed ledger technology application in business and governance environment. Those smart contracts which were created through interaction of lawyers and developers and are intended to also be enforceable legal contracts are called smart legal contracts.

In the legal context DLT and smart contracts are distinct and face their own problems and challenges. Issue of situs is an example which relates to DLT rather than smart contracts. International private law and legislation of various jurisdictions require to identify the location of an asset or place of an agreement in order to solve conflict of law problem and determine the applicable governing law. "However, the distribution of the register across nodes in multiple jurisdictions raises a seemingly intractable problem – under current legal principles at least – as to where the situs should be." Holding something on DLT, including smart contract or title to an asset, does not isolate it from the legal system and laws of respective jurisdiction. "Some blockchain enthusiasts may have misinterpreted the statement 'code is law' as implying that code can supersede the law or that decentralised networks create their own legal regimes."

In case of a dispute between the parties of the smart contract within the DLT, the issue arises where the distributed ledger is located in order to determine the place for dispute resolution. "Blockchain also poses questions concerning the ability to identify the parties to a transaction, to the extent a system utilizing this technology remains anonymous, which may rise a host of additional issues related to dispute resolution."

An absence of legal compliance mechanism on DLT, self-executing nature of code on DLT and limited ability to update the code if the law changes create a number of legal issues. There are several possible solutions of addressing these issues. "One method could be a system in which the relevant jurisdiction creates a publicly available database and application programming interface (API) of relevant legal provisions. These would be provisions related to the terms of the contract. The smart contract would call these terms and would be able to update those provisions terms in accord with the jurisdiction's update of the database."

On more conservative side of DLT and law interaction spectrum are two solutions proposed by Alicia Prince:

"(1) To introduce the concept of a 'Superuser' for government authorities, which will have a right to modify the content of Blockchain databases in accordance with a specified procedure in order to reflect the decisions of state authority.

(2) To enforce decisions of state authorities in 'offline' mode by pursuing the specific users and forcing them to include changes in Blockchain themselves as well as by using traditional tort claims, unjust enrichment claims, and specific performance claims."

To facilitate the self-execution, a smart contract needs access to sources of event information through which the execution of its terms and conditions is assessed. "In the interest rate swap example, the distributed ledger must have access to assets of the parties in order to fulfil the parties' payment obligations, and it must have access to a provider of interest rate information." The solutions to the issue of access to assets vary and may be solved through locking and release of assets in smart contract as it is performed through use of cryptocurrency Ether on Ethereum blockchain or by introducing new mechanism of access to assets like 'cash states' proposed by Corda distributed ledger. The solution to the issue of access to information may require use of so-called 'Oracles' – an external party (or a machine) providing the judgement to determine whether or not respective conditions under the agreement have been met. "Turning again to the interest rate swap example, an oracle could be used to provide interest rate information on a payment calculation date. The oracle's digital signature would be retained on the distributed ledger so that parties could review the payment process and confirm that payments were made correctly."